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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (48296)	4/27/2000 1:19:00 AM
From: Mike Harkness	Respond to of 99985

Yiwu, thanks for the info. Mike

To: RealMuLan who wrote (48296)	4/27/2000 1:27:00 AM
From: Michael Watkins	Read Replies (1) \| Respond to of 99985

Re Exhaustion Gap, Its certainly a possibility. I give it a 40% chance that it is an exhaustion gap, basing the low probability factor on the history of the COMPX. I can't find any occasion where the index was in a steep decline where a gap down was not met with more selling. THe closest parallel (in time) is Aug 1990, a rap down, rally up for 2 days... sideways for a week or more, and continued to head lower. Oct 89, similar situation. Using the simple code - High < Low[1] - I paint every bar and its pretty clear that gapping lower, when already at relative lows, has much more often than not proven to be a sign of more downside to come. On the COMPX at least. The lows of that gap day must hold or... down down down. If we look at weekly bars instead, this week so far is an inside bar/harami. Three weeks ago a very long hammer was taken out and shot. Its not normal to see such situations resolve to the bullish side right away. I'm not saying doom and gloom is a certainty, but I am suggesting that this dip is not like all the previous ones. mw